Hourly rate needed to hit a target after-tax income.
Hourly rate needed
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Gross billings
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Tax on gross
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Monthly net
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Pricing backwards from the money you keep
Most freelancers in Pakistan set a rate by copying what others charge, then discover at tax time that the take-home was thinner than expected. This tool flips the logic. You name the after-tax income you want to keep for the year, and it works out the gross billings, and therefore the hourly rate, that gets you there once income tax and business expenses are paid. It is built for sole proprietors and independent contractors invoicing local or overseas clients, not for salaried staff.
The hard part is that Pakistan taxes non-salaried individuals on a progressive slab card administered by the Federal Board of Revenue (FBR). Because each higher slice of income is taxed at a higher rate, you cannot just gross up by a flat percentage. The required gross has to be solved by working up the slabs until the leftover, after tax and expenses, equals your target. The calculator does that search for you. Above PKR 10 million of income a surcharge also applies on the tax due; below it, as in the example here, the surcharge is nil.
From a PKR 3 million take-home to an hourly number
Say you want to keep PKR 3 million after tax, you bill 1,500 hours in the year, and your business costs, software, internet, a co-working desk, run PKR 300,000. The tool solves to PKR 4.45 million of gross billings. The income tax on that gross, using the non-salaried slab rates this calculator applies, builds up slab by slab as follows. Treat these rates as the figures the tool models, not as certified current law, and confirm the live slabs with the FBR before you quote a client.
| Slab of gross income | Rate | Tax in slab |
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So PKR 4.45 million gross, minus PKR 1.15 million tax, minus PKR 300,000 expenses, leaves exactly PKR 3 million. Divide the gross by 1,500 hours and you need to bill about PKR 2,967 an hour. That is the headline the tool returns, and the monthly net works out to PKR 250,000.
The billable-hours trap and other adjustments
The single biggest error freelancers make is treating every working hour as billable. If you sit at the desk 2,000 hours a year but only 1,500 are invoiced, because the rest goes to pitching, admin, and unpaid revisions, then dividing by 2,000 understates your true rate and you will fall short. Enter the hours you can realistically bill, not the hours you work. A second adjustment worth making: the tool counts income tax but not the provincial sales tax on services that IT and consulting work can attract. If your clients are local and your service is taxable, you may also have to charge and remit that to the relevant provincial revenue authority on top of the rate here.
A practical tip on the buffer
Round your quoted rate up, not down. The slab card means the last rupees you earn are taxed hardest, so a small revenue miss eats disproportionately into the bottom line. Quoting PKR 3,200 instead of PKR 2,967 on the example above builds a cushion for the unbilled hours, late payers, and the odd client who negotiates you down.
Do overseas clients change the tax here?
The income tax this tool models is the same regardless of where the client sits, because it taxes your income. What can differ is the export treatment: receipts from exported IT and IT-enabled services often attract a reduced services tax and special documentation rules. This calculator deliberately keeps the standard slab card for income tax; check the export rules and any reduced rate with the FBR if most of your invoices go abroad.
Should I register and file as a freelancer?
Yes, in almost every case. Filing keeps you on the Active Taxpayer List, which lowers the withholding banks and platforms deduct from you and lets you reconcile the tax you have already paid. The cost of staying off the list, in higher deductions across your accounts, usually dwarfs the effort of an annual return.